Private sector lender Axis Bank was in the black in the December quarter reporting a 4.5 percent year-on-year gain in net profit at Rs 1,757 crore. Higher provisions and high base in Q3FY19 due to recovery in steel sector supported profitability.
The bank had reported a loss of Rs 112.08 crore in the previous quarter.
The year-ago quarter had included a significant recovery of Rs 800 crore in the steel sector.
Net interest income (NII), the difference between interest earned and interest expended, grew by 15.16 percent year-on-year to Rs 6,452.98 crore, which was ahead of Rs 6,350.9 crore estimated by a CNBC-TV18 analysts poll.
Loan growth was strong for the quarter at 5.5 percent sequentially and 16 percent (the highest since Q3FY18) YoY, indicating the bank has been gaining market share along with healthy NII.
Net interest margin at 3.57 percent was the highest in the last 10 quarters.
"Domestic loans grew 18 percent while the overseas book de-grew by 7 percent. Retail loans increased 25 percent YoY to Rs 2,91,554 crore and accounted for 53 percent of the net advances, while corporate loan book grew by 9 percent," Axis Bank said, adding deposits rose by 15 percent YoY.
Asset quality was largely stable, with gross non-performing assets (NPA) as a percentage of gross advances rising 3bps QoQ to 5 percent and net NPA climbing 10bps QoQ to 2.09 percent in Q3FY20.
The bank said specific loan loss provisions for Q3FY20 were Rs 2,962 crore, which declined 11.6 percent YoY and increased 9.66 percent QoQ.
Total provisions, including for standard assets and others, were Rs 3,471 crore for the quarter (up 13.63 percent YoY and down 1.3 percent QoQ), it added.
The bank recognised slippages of Rs 6,214 crore during Q3FY20, which grew by 24.7 percent QoQ and 65.88 percent YoY.
"Slippages from the loan book were at Rs 5,124 crore and that from investment exposures stood at Rs 1,090 crore. Corporate slippages stood at Rs 3,891 crore. 81 percent of this came from previously disclosed BB and below rated clients (fund based loans, non-fund based loans and investment holdings)," Axis Bank said.
"Recoveries and upgrades from NPAs during the quarter were Rs 2,422 crore while write-offs were Rs 2,790 crore. Consequently, net slippages (before write-offs) for the quarter stood at Rs 3,792 crore compared to Rs 2,770 crore in Q2FY20 and Rs 2,124 crore in Q3FY19."
Other income (non-interest income) fell 5.35 percent year-on-year to Rs 3,786.6 crore due to a high base in the year-ago period, but pre-provision operating profit (PPoP) grew by 4 percent to Rs 5,742.69 during the quarter.
"Adjusted for a previously disclosed one-off recovery of Rs 800 crore in Q3FY19, PPoP grew 22 percent YoY," the lender said in its BSE filing.
Tax expenses for the quarter stood at Rs 514.77, down 35 percent compared to the same period last year.
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